The prices of formulations using ibuprofen and erythromycin are likely to be reduced. The price rise is expected to be in the range of around 20%. The NPPA was set up in 1997 as the official body to administer the Drug Price Control Order (DPCO). It announces price revisions almost every month. Most of the times the recommendations do affect the multinational pharmaceutical companies since they are the ones which have a relatively higher proportion (anywhere between 45-60%) of the revenues accruing from products under price control.
The companies affected are Abbott Laboratories, Knoll Pharmaceutical, Hoechst Marion Roussel, and Alembic Chemicals. Abbott Laboratories is the market leader in the erythromycin segment with a market share of 35% plus. Similarly Knoll derives more than 20% of its revenues from Brufen (its ibuprofen based formulation) and is a market leader in the segment.
The formulation prices are being reduced on the basis of the fact that the bulk drug prices of the respective formulations have dropped.
Sorry! There are no related views on news for this company/sector.
A tiny chemical company, started in the Licence Raj era, is a great example of a new wealth creating opportunity.
In this video I'll show you exactly how I go about picking stocks for trading.
Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.
What should you do if the market falls? In this video, I'll tell you what I will do.
Ajit Dayal on how India's vaccine strategy will impact the markets.
More
Equitymaster requests your view! Post a comment on "Knoll, Abbott likely to be affected by NPPA decision". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!